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in San Anselmo, CA
San Anselmo sits in Marin County, where home prices typically push borrowers toward every advantage they can get. Both FHA and USDA loans offer lower barriers to entry than conventional financing, but they work in fundamentally different ways.
FHA loans work anywhere and require just 3.5% down with a 580 credit score. USDA loans offer zero down payment but come with income caps and property location restrictions that can eliminate options in parts of Marin County.
FHA loans let you buy with 3.5% down if your credit score hits 580. You'll pay mortgage insurance for the life of the loan unless you refinance later, but approval standards are more forgiving than conventional programs.
These loans work on any property type in any location, including condos that meet FHA approval. Debt-to-income ratios can stretch to 50% with compensating factors, and sellers can contribute up to 6% toward your closing costs.
USDA loans require zero down payment and offer lower mortgage insurance than FHA. The catch: your income can't exceed 115% of the area median, and the property must sit in a USDA-eligible zone.
Marin County's high incomes disqualify many households immediately. A family of four earning over roughly $125,000 won't qualify regardless of the property location. Credit requirements typically start at 640, slightly higher than FHA.
The down payment gap matters most: 3.5% down on a $900,000 home means $31,500 out of pocket with FHA. USDA requires nothing down, but most San Anselmo properties exceed USDA loan limits or fall outside eligible zones.
Income limits create the second major split. USDA caps household income at 115% of area median, which in Marin County eliminates most dual-income professionals. FHA has no income ceiling, just debt-to-income requirements.
Mortgage insurance costs differ too. FHA charges 1.75% upfront plus 0.55% to 0.85% annually. USDA charges 1% upfront and 0.35% annually, making it cheaper if you qualify. Rates vary by borrower profile and market conditions.
USDA loans make sense if you earn under $125,000 as a household, find a property in an eligible zone, and want to avoid saving for a down payment. Check USDA eligibility maps first—many San Anselmo areas won't qualify due to population density.
FHA fits everyone else: higher earners, buyers targeting central San Anselmo locations, or anyone who needs maximum flexibility on property choice. The 3.5% down payment requirement is manageable for most, and you avoid the income verification hassle.
I see few USDA deals close in Marin County compared to FHA. The income limits and location restrictions eliminate too many borrowers. If USDA works for your situation, it's the better deal. Most buyers here end up with FHA or conventional financing.
No. USDA restricts financing to designated rural and suburban areas. Many San Anselmo neighborhoods fail the population density test and won't qualify.
USDA charges less: 0.35% annually versus FHA's 0.55% to 0.85%. But FHA lets you cancel insurance by refinancing once you hit 20% equity.
Yes. FHA allows up to 6% seller contributions toward closing costs. USDA also permits seller concessions, though limits vary by deal structure.
FHA approves scores as low as 580 for 3.5% down. USDA typically requires 640 minimum, though some lenders accept lower scores with compensating factors.
No. Household income caps adjust slightly for larger families, but Marin County limits still disqualify most dual-income households regardless of family size.